01/03/2007 | Methyl Hydrates as a Potential in the Global Energy Industry

Stratfor Staff

Japan will begin test drilling and extracting methyl hydrates -- natural gas trapped in frozen water -- in March. If the technology to harvest and utilize natural gas is successful, it could transform the face of the energy industry by making a globally abundant form of natural gas available to countries currently dependent on imports.

In March, state-run Japan Oil, Gas and Metals National Corp. (JOGMEC) will begin test production of natural gas from methyl hydrates -- natural gas trapped in frozen water -- extracted from Canadian permafrost. In conjunction with Canada's natural resources ministry, JOGMEC drilled a test well Feb. 23 in Canada's Arctic Circle permafrost. If Japan, or anyone else, can develop a successful method of extracting methyl hydrates, even the conservative estimates predict a tenfold increase in global natural gas supplies. This would completely restructure the energy industry worldwide.

Reserves of traditional natural gas that can be extracted with current technology are predicted to last about 60 years at current consumption levels. Though these reserve estimates total about 370 trillion cubic meters (tcm), rough estimates of methyl hydrate deposits range from 2,800 tcm to 8.5 million tcm, according to the U.S. Geological Survey. The Woods Hole Oceanographic Institution estimates that the United States alone has as much as 8,500 tcm. If a reliable technology can be found to harvest natural gas hydrates, it could hugely increase world reserves.

Methyl hydrate is natural gas trapped in a solid matrix of frozen water. Once released, it becomes just like normal natural gas. Methyl hydrate is found in and under permafrost, and on the ocean floor at depths greater than about 1,600 feet. An increase in temperature or a decrease in pressure can trigger the release of the methyl hydrate as natural gas. The most recoverable deposits of methyl hydrate are found in coarse, porous sandstone deposits, which primarily occur on land in permafrost conditions in the Arctic. Deep-sea deposits are more liberally distributed around the globe, but are characteristically made up of tightly packed grains of silt, which make for thinly distributed deposits that are harder to recover.

These characteristics make extracting methyl hydrate extraordinarily difficult. If ocean-floor deposits are disturbed by poorly implemented extraction attempts, or by earthquakes, it can cause the sea to "boil" as natural gas bubbles up from the bottom. The resultant high waves and lowered water density can sink both ships and drilling platforms.

Three methods are being explored for releasing natural gas from its methyl hydrate form. The first is to heat the hydrate reservoir with hot water or steam to initiate vaporization. This method, however, often uses more energy than it actually recovers. The second is to inject an inhibitor -- like methanol or glycol -- that reduces the hydrate stability, but this requires that a relatively large amount of inhibitor be applied across a large area, and is also cost-ineffective. The final method, the one being tried by the Japanese, is to reduce the pressure, allowing the hydrate to vaporize in the drill well, which then allows the harvesting of natural gas by more conventional means.

The development of methyl hydrate deposits is not a short-term goal. Not only does a reliable technology need to be implemented, but a reasonable infrastructure must also be built. Natural gas is difficult to store and ship, so natural gas producers must build extensive pipelines and storage facilities if they are serious about exploiting hydrates. In places like the North Slope of Alaska, where there are established pipelines and roads, methyl hydrate extraction could develop relatively rapidly. For the frozen wastelands of Siberia or the floor of the ocean, it would be a different story.

If any of these methods could be made to work on a wide scale, it would revolutionize the world energy market, as it would mean the near-global availability of abundant natural gas, which could potentially turn major natural gas importing states such as the United States or the United Kingdom into net exporters.